Taxpayer to take on mortgage risks of first-time buyers

[johnb]

Sorry, but I do not believe that building more houses will go any where near solving the problem (at best it will merely ameliorate the situation). You only have to look at this chart (from Wikipedia) to appreciate the scale of how house prices have spiralled during the last 20 years. It has hall marks of a bubble - and we all know what happens to bubbles.

The only real solution is for house prices to decline very significantly, hopefully gradually over many years. Of course the politicians are too terrified of the electorate to do anything but feed the bubble.



(The prices in the graph are adjusted for inflation.)

[ahinton]

even in our skewed housing markets, the laws of supply and demand pretty much apply.
The availabilty of land for housing, and its consequent cost are a major factor.
I accept that there is a built in problem of land banks bought by builders at top prices.......but that could be sorted out.

How? Yes, of course, in principle, the laws of supply and demand would and perhaps even should be expected to work in this context as in most others, but they won't in practice if the speculators decide otherwise which, in this instance, they undoubtedly will, just as they invariably have done to date.

[Serial_Apologist]

How? Yes, of course, in principle, the laws of supply and demand would and perhaps even should be expected to work in this context as in most others, but they won't in practice if the speculators decide otherwise which, in this instance, they undoubtedly will, just as they invariably have done to date.

Precisely. The so-called law of supply and demand is a capitalist law; it doesn't work, due to the anarchic, unplanned, unholistic nature of capitalism, in which speculators play an evermore debilitating part on behalf of the rest of the population.

[teamsaint]

so, if you don't think building more houses is the answer, (because the markets are fatally flawed ) what is the answer to our housing shortage?

Doing nothing still looks like a lousy option.

Building more houses and flats, whether for rent or sale might just work !!

Oh, and i would put a very big tax on land sold for building development also, to be re invested in the cost of building social housing.

[ahinton]

so, if you don't think building more houses is the answer, (because the markets are fatally flawed ) what is the answer to our housing shortage?

Doing nothing still looks like a lousy option.

Building more houses and flats, whether for rent or sale might just work !!

Oh, and i would put a very big tax on land sold for building development also, to be re invested in the cost of building social housing.

First, we have to consider whether and to what extent there really is a housing shortage or whether it's more a matter of who can afford to live where. Second, what makes you think that there's necessarily an answer? Third, building more houses and apartments for rent or sale costs money; where's it coming from and, in any case, what will be the good of some of that if the properties stand empty because people can't afford either to buy or rent them? Fourth, you put that tax on and people who own such land will refuse to part with it until you cancel it - which will mean that the Treasury doesn't actually receive any of that tax and there's therefore no additional funds to be invested in building "social housing", by which I presume you to mean housing built by local authorities on land owned by those local authorities. Local authorities up and down the land are keen to reduce their housing stock because (a) they need the money and (b) they can't afford to maintain it properly.

On the basis that 3 × gross salary is a reasonable maximum to extend to most people in the form of mortgages and the average UK annual salary is still only £20k+, it is obvious that, until and unless housing prices drop substantially, there is likely to be no solution to this problem because many people cannot afford to purchase or rent their own homes; if the market collapses and such price falls do occur, however, there will be many billions of pounds' worth of such negative equity that much of it will be irrecoverable by means of repossession, thereby vastly increasing national indebtedness.

[Dave2002]

Anna is right that there are lots of built in problems in the market.

But the solution to the supply problem, which is a huge problem, is simple: build more houses and flats. This involves allowing more redevelopment, more use of land etc, some of which may not be popular with everybody.

It can be done. But there is no political will.(presumably because politicians kids aren't the ones struggling to buy or rent a house.

Is part of the problem that there are actually enough houses, but they are in places that people don't want to live - such as around Liverpool or Newcastle? Another thing might be that more people do expect to have houses, though I don't think that's the issue really. Many people in their 20s and even 30s are moving back in with their parents and relatives for one reason or another. I don't think we as a country should simply build more without thinking about the implications of that.

[teamsaint]

Is part of the problem that there are actually enough houses, but they are in places that people don't want to live - such as around Liverpool or Newcastle? Another thing might be that more people do expect to have houses, though I don't think that's the issue really. Many people in their 20s and even 30s are moving back in with their parents and relatives for one reason or another. I don't think we as a country should simply build more without thinking about the implications of that.

its no doubt true that there are lots of empty houses in places where people don't want to live.
If part of the answer is to make those places and houses more attractive to live in then that is all to the good.

Jobs tend to be a problem in those areas, though.

Look at the cost of small terraced houses in London as a comparison.

[Dave2002]

Jobs tend to be a problem in those areas, though.

Look at the cost of small terraced houses in London as a comparison.

And who's fault is that?
There's no real sensible reason why lots of organisations can't operate in places like Liverpool, Newcastle, Bradford etc.
OK, the weather might be a bit colder, but that's maybe not a huge problem. The world doesn't have to revolve round London.

[teamsaint]

It would be far better for us all if the work and decent housing was spread throughout the country.

Anyway, our population is growing at 250k pa, and we already have sky high(and rising ) rents, and property at very high prices compared to wages.

Time to do something.
Move the jobs, and build more where there is work.

We have lots of spare land. Lots of it is useless set aside, or military, or used for ecologically useless agricultural crops, or brown field, etc.

Time to get real, and feed, house and care for our people.

Not time to keep property and land prices high, at the cost of all else.

[MrGongGong]

What is a useless agricultural crop please ?

[teamsaint]

well, for example, the huge maize field that I drive past quite often, which inexplicably, was never harvested this year.

Stuff grown only because it attracts artificially high EU subsidised prices.(does that still happen)

Beetroot. (horrible stuff).

linseed. (or maybe it has a purpose........is it the same as flax seed?)

[MrGongGong]

I'm not a farmer
but live surrounded by agricultural land

The "Beetroot" you see is Sugar Beet
linseed is hardly "useless" (http://en.wikipedia.org/wiki/Linseed_oil)
I think you will find that we no longer have grain mountains though without subsidy a cold winter would put some completely out of business
Maize has many uses and is not simply "sweetcorn"

[teamsaint]

Unharvested maize has a use?
beetroot should be banned. Its horrible.

anyway, it was only part of the point.

we need to build houses. if some things go by the way, like huge swathes of land used for rearing pheasants to be shot at by football chairmen and bankers, the so be it.
they can start round my neck of the woods. Although not building in woods, obviously. especially not near me.

[vinteuil]

beetroot should be banned. Its horrible.

.

au contraire. As has been expounded on another thread, beetroot can be excellent: I referred to Mme Vinteuil's Beetroot Soup; others had other good beetroot ideas...

[ahinton]

It would be far better for us all if the work and decent housing was spread throughout the country.

Anyway, our population is growing at 250k pa, and we already have sky high(and rising ) rents, and property at very high prices compared to wages.

Time to do something.
Move the jobs, and build more where there is work.

We have lots of spare land. Lots of it is useless set aside, or military, or used for ecologically useless agricultural crops, or brown field, etc.

Time to get real, and feed, house and care for our people.

Not time to keep property and land prices high, at the cost of all else.

But - as I have asked previously - where is the money coming from to buy the requisite plots of land and fund these building projects and what guarantees will there be that sufficient people will be able to purchase or rent the properties built? Of course housing prices need to be different in order to make homes affordable for far more people, but how would you achieve this and, even if you could achieve it, what would you do about the many billions of pounds' worth of negative equity that this will create for existing homeowners whose lenders will no longer be able to recoup the monies that they've lent on them?